NMHG Holding Co.

Leading market positions Good customer diversity Solid brand images and large distribution network Fair amount of maintenance and replacement parts sales Cyclical and volatile market demand Manufacture of engineered commodity products Cost structure, which is still a work in progress Somewhat aggressive financial profile Exposure to raw material price swings Risks of a financial company joint venture in which it is a part owner The speculative-grade ratings on Portland, Ore.-based NMHG Holding Co. reflect its vulnerable financial risk profile, fair liquidity, and fair business risk assessment with leading positions in cyclical and volatile markets. NMHG competes in the global forklift truck market, which is characterized as moderate in size, somewhat consolidated, and modestly capital intensive. Over the business cycle, the

...ISSUER CREDIT RATING NMHG Holding Co. Corporate Credit Rating ##-/Negative/-- AFFIRMED RATINGS NMHG Holding Co. Sr unsecd debt Local currency B+ Sr secd debt Local currency ##- Business profile: Weak Financial policy: Aggressive Bank lines/Liquid assets: NMHG Holding Corp. has a $135 million senior secured bank line due May 2007 and had about $59 million in cash and equivalents at Sept. 30, 2005. Collateralization: The bank facility is secured by essentially all of the company's assets and capital stock. The facility is rated the same as the corporate credit rating. Availability under the facility is determined using a borrowing base, and it is secured by essentially all of the assets and capital stock of NMHG's operations. Standard & Poor's Ratings Services severely discounted the company's cash flows to simulate a default scenario and capitalized them with an EBITDA multiple reflective of NMHG's peer group. In such a scenario, we believe that the collateral value would provide a strong...

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